Every purchase home loan or refinance comes with fees and costs and VA loans are no different. So, if you’re ready to get a VA loan, it’s a smart idea to talk with your lender about the extra charges and fees that will come with your loan.
VA Closing Costs often include:
- Insurance and taxes
- Fees for surveys, credit reports, and express mail
- Fees for appraisals, title, recording, and VA funding
As with any FHA or conventional loan, VA loans require closing costs. Before you sign the terms of your loan, you’ll want to review the closing costs associated with your loan and who will be paying them. Looking to buy a new home and need help in understanding closing costs for VA loans?
About VA Closing Costs and Fees
Whether you’re buying a home or just refinancing, it’s a smart idea to understand the closing costs and fees associated with your loan and how they will affect you. While VA loans vary from typical conventional loans, they are similar in the way that they also carry closing costs. Fortunately, to protect veterans, the VA also provides rules and certain criteria to control to whom lenders are allowed to charge costs and fees and for what things lenders are allowed to charge those fees.
Under these rules, you can expect to see the following fees in the typical VA loan:
- Taxes and insurance
- Hazard insurance
- Credit report
- Express mail fees
- Recording fees
- Appraisal fees
- Title fees
- VA funding fees
Not all of the VA loan closing costs and fees you will face are included in this list, but VA loans have some special features to keep these from getting out of control. For instance, your VA loan will include a feature called a “fee tree,” which designates which costs and fees can be applied based on various borrower criteria. Also, lenders cannot charge any flat fees—in lieu of all of the other charges for the origination of the loan not expressed in the guidelines—beyond 1% of the loan amount.
The costs included in the 1% flat rate charge are:
- Any broker or third party fees
- Commitment fees
- Any attorney's fees (except for title)
- Conveyance and closing fees
- Truth-in-lending disclosure fees
- Escrow, Notary, mail, and tax fees
- Application, processing, or trustee's fees
- Appraisal and Lender's inspection (except in construction loans)
- Amortization schedules, passbooks, or entrance or membership fees
Stipulations require that every VA loan has a required funding fee. The only exception to this rule regards VA loans for surviving spouses of Veterans who died in military service that are receiving VA compensation as well as for veterans who are receiving VA compensation for any disabilities connected to their military service. To learn more about this topic, we recommend that you research the fee schedule, which further explains this specific VA loan funding fee.
Check out the table here.
Overall, VA loans and refinances are subject to closing costs and fees, just like any conventional loan. Doing your own research on these loans will help you avoid any last-minute surprises in securing your VA loan and can make you more informed throughout the process. You’ll never regret taking the amount of time you need to sit down with your lender to review and understand every closing cost and fee attached to your VA loan.
See if you qualify for a VA loan.